The Africa dummy revisited - The African growth gap, development policy and the realization of the MDGs
Eva Dettmann
African Development Perspectives Yearbook, No. 13,
2008
Abstract
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Are European Equity Style Indices Efficient? – An Empirical Quest in Three Essays
Marian Berneburg
Schriften des IWH,
Nr. 28,
2008
Abstract
Many situations in the history of the stock markets indicate that assets are not always efficiently priced. But why does it matter whether the stock market is efficiently priced? Because “well-functioning financial markets are a key factor to high economic growth”. (Mishkin and Eakins, 2006, pp. 3-4) In three essays, it is the aim of the author to shed some more light on the topic of market efficiency, which is far from being resolved. Since European equity markets have increased in importance globally, the author, instead of focusing on US markets, looks at a unified European equity market. By testing for a random walk in equity prices, revisiting Shiller’s claim of excess volatility through the means of a vector error correction model, and modifying the Gordon-Growth-Model, the book concludes that a small degree of inefficiency cannot be ruled out. While usually European equity markets are pricing assets correctly, some periods (e.g. the late 1990s and early 2000s) show clear signs of mispricing; the hypothesis of a world with two states (regime one, a normal efficient state, and regime two, a state in which markets are more momentum driven) presents a possible explanation.
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The Identification of Regional Industrial Clusters Using Qualitative Input-Output Analysis
Mirko Titze, Matthias Brachert, Alexander Kubis
IWH Discussion Papers,
Nr. 13,
2008
Abstract
The ‘cluster theory’ has become one of the main concepts promoting regional competitiveness, innovation, and growth. As most studies focus on measures of concentration of one industrial branch in order to identify regional clusters, the appropriate analysis of specific vertical relations within a value-adding chain is developing in this discussion. This paper tries to identify interrelated sectors via national input-output tables with the help of Minimal Flow Analysis by Schnabl (1994). The regionalization of these national industry templates is carried out with the allocation of branch-specific production values on regional employment. As a result, the paper shows concentrations of vertical clusters in only 27 of 439 German NUTS-3 regions.
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Will Oil Prices Decline Over the Long Run?
Filippo di Mauro, Robert K. Kaufmann, Pavlos Karadeloglou
ECB Occasional Paper Series,
Nr. 98,
2008
Abstract
At present, oil markets appear to be behaving in a fashion similar to that in the late 1970s and early 1980s when oil prices rose sharply over an extended period. Furthermore, like at that time, analysts are split on whether such increases will persist or reverse, and if so by how much. The present paper argues that the similarities between the two episodes are not as strong as they might appear at first sight, and that the likelihood of sharp reversals in prices is not particularly great. There are a number of reasons in support of the view that it is unlikely that the first two decades of this century will mimic the last two decades of the previous century. First, oil demand is likely to grow significantly in line with strong economic growth in non-OECD countries. Second, on the supply side, OPEC is likely to enhance its control over markets over the next two decades, as supply increases in newly opened areas will only partially offset declining rates of production in other geologically mature non-OPEC oil regions. Moreover, while concerns about climate change will spur global efforts to reduce carbon emissions, these efforts are not expected to reduce oil demand. Finally, although there is much talk about alternative fuels, few of these are economically viable at the prices currently envisioned, and given the structural impediments, there is a reduced likelihood that the market will be able to generate sufficient quantities of these alternative fuels over the forecast horizon. The above factors imply that oil prices are likely to continue to exceed the USD 70 to USD 90 range over the long term.
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Shrinking due to corpulence? BMI in childhood predicts subsequent linear growth among US children and youth, 1963-1970
Marco Sunder
Annals of Human Biology,
2008
Abstract
While the USA is one of the most opulent countries, its population is not among the tallest but is among the most corpulent. This short report investigates the association between body mass index in childhood and subsequent change in height-for-age at the individual level, based on data from the National Health Examination Study (1963-1970). A sub-sample of participants in this survey was measured twice at intervals between 2.3 and 4.4 years, and assessed bone age can be used to account for differences in maturation at baseline. Regression results indicate that a BMI-for-age above the 85th percentile is associated with a reduction in growth by 0.03-0.06 height-for-age standard deviations per year, or roughly 1 cm within 4 years. An inefficiently high nutritional status in childhood may thus jeopardize subsequent linear growth. However, the trans-Atlantic height gap is considerably larger than what this empirical relationship could predict.
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Regional origins of employment volatility: evidence from German states
Claudia M. Buch
CES IFO Working Paper No. 2296,
2008
Abstract
Greater openness for trade can have positive welfare effects in terms of higher growth. But increased openness may also increase uncertainty through a higher volatility of employment. We use regional data from Germany to test whether openness for trade has an impact on volatility. We find a downward trend in the unconditional volatility of employment, paralleling patterns for output volatility. The conditional volatility of employment, measuring idiosyncratic developments across states, in contrast, has remained fairly unchanged. In contrast to evidence for the US, we do not find a significant link between employment volatility and trade openness.
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Growth versus Equalisation? An Examination of Strategies for Regional Policy in the Czech Republic, Hungary and Poland after EU Accession
Gerhard Heimpold
Jahrbuch für Regionalwissenschaft,
Nr. 1,
2008
Abstract
Im Beitrag wird am Beispiel der drei neuen Mitgliedsländer der Europäischen Union (EU) - Tschechische Republik, Ungarn und Polen - untersucht, wie dort in der Phase nach dem EU-Beitritt im Rahmen der verfolgten regionalpolitischen Strategien das Verhältnis zwischen Wachstums- und Ausgleichsziel ausgestaltet wurde. Die Untersuchung betrifft den Einsatz der EU-Strukturfonds-Mittel für regionalpolitische Zwecke im Zeitraum 2004-2006 und gibt einen Ausblick auf die Förderperiode 2007 bis 2013. Trotz gewisser im Detail sichtbarer Unterschiede bei der Gewichtung zwischen Wachstums- und Ausgleichziel verfolgen alle drei untersuchten Länder eine Doppelstrategie, die sowohl auf die Stärkung vorhandener Entwicklungspole als auch auf die Unterstützung der schwächsten Regionen ausgerichtet ist. In der begonnenen Förderperiode 2007-2013 könnte sich im Zusammenhang mit der Absicht, die EU-Strukturpolitik stärker in Einklang mit der Lissabon-Agenda zu bringen, Anreize für eine
ausgeprägtere Wachstumsorientierung in der Regionalpolitik der drei Länder ergeben.
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Spillover Effects of Spatial Growth Poles - a Reconciliation of Conflicting Policy Targets?
Alexander Kubis, Mirko Titze, Joachim Ragnitz
IWH Discussion Papers,
Nr. 8,
2007
Abstract
Regional economic policy faces the challenge of two competing policy goals - reducing regional economic disparities vs. promoting economic growth. The allocation of public funds has to weigh these goals particularly under the restriction of scarce financial re- sources. If, however, some region turns out to be a regional growth pole with positive spillovers to its disadvantaged periphery, regional policies could be designed to recon- cile the conflicting targets. In this case, peripheral regions could indirectly participate in the economic development of their growing cores. We start our investigation by defining and identifying such growth poles among German regions on the NUTS 3 administrative level based on spatial and sectoral effects. Using cluster analysis, we determine significant characteristics for the general identification of growth poles. Patterns in the sectoral change are identified by means of the change in the employment. Finally, we analyze whether and to what extent these growth poles ex- ert spatial spillover effects on neighbouring regions and thus mitigate contradictory in- terests in regional public policy. For this purpose, we apply a Spatial-Cross-Regressive- Model (SCR-Model) including the change in the secondary sector which allows to con- sider functional economic relations on the administrative level chosen (NUTS 3).
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Systematic Mispricing in European Equity Prices?
Marian Berneburg
IWH Discussion Papers,
Nr. 6,
2007
Abstract
One empirical argument that has been around for some time and that clearly contra- dicts equity market efficiency is that market prices seem too volatile to be optimal estimates of the present value of future discounted cash flows. Based on this, it is deduced that systematic pricing errors occur in equity markets which hence can not be efficient in the Effcient Market Hypothesis sense. The paper tries to show that this so-called excess volatility is to a large extend the result of the underlying assumptions, which are being employed to estimate the present value of cash flows. Using monthly data for three investment style indices from an integrated European Equity market, all usual assumptions are dropped. This is achieved by employing the Gordon Growth Model and using an estimation process for the dividend growth rate that was suggested by Barsky and De Long. In extension to Barsky and De Long, the discount rate is not assumed at some arbitrary level, but it is estimated from the data. In this manner, the empirical results do not rely on the prerequisites of sta- tionary dividends, constant dividend growth rates as well as non-variable discount rates. It is shown that indeed volatility declines considerably, but is not eliminated. Furthermore, it can be seen that the resulting discount factors for the three in- vestment style indices can not be considered equal, which, on a risk-adjusted basis, indicates performance differences in the investment strategies and hence stands in contradiction to an efficient market. Finally, the estimated discount rates under- went a plausibility check, by comparing their general movement to a market based interest rate. Besides the most recent data, the estimated discount rates match the movements of market interest rates fairly well.
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Globalisation and Euro Area Trade: Interactions and Challenges
Filippo di Mauro, Ursel Baumann
ECB Occasional Paper,
Nr. 55,
2007
Abstract
As a major player in world trade, the euro area is strongly influenced by globalisation, but is far from being a passive spectator. The paper analyses how the euro area's trade specialization has changed in response to stronger international competition and the emergence of new global players, evaluating results and possible challenges ahead. The message remains mixed. On the positive side, the export specialisation of the euro area is increasing in some medium-high or high-tech sectors where productivity growth is strong and demand robust, such as pharmaceuticals, also by a more intensive recourse to importing intermediate goods from low-cost countries. On the other hand, in comparison to other industrialised economies, the euro area has been somewhat slower in moving towards research-intensive goods and away from labour-intensive sectors. While this could reflect data classification issues, it may also be a sign of structural rigidities in the euro area, which hinder adjustment processes.
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